eCommerce Platforms are an Uphill Battle for Luxury Brands

The deck is stacked against luxury brands when it comes to the major eCommerce platforms. Amazon, Target and Walmart all have intricacies that make breaking through as a luxury brand difficult. Some of the challenges are structural with the platform themselves – but shifting consumer preferences also make success on the major eCommerce platforms difficult for luxury brands.

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Over two-thirds of U.S. consumers start their product searches on Amazon. Not having your brand visible on the platform limits your chances of being found. But the way Amazon’s A9 search algorithm is written creates its own obstacles for high-end brands.

Built for Conversions

Amazon’s stated goal is to provide the best experience for shoppers. And to do that they rely on putting the most relevant products in front of consumers every time they start a product search. How does Amazon determine relevancy?

Customer conversions is one of the most powerful relevancy signals in the Amazon algorithm. Product rankings and visibility is largely determined by what products are being purchased the most by Amazon shoppers. Brand recognition or loyalty on the platform has little to do with that.

Over 50% of Amazon shoppers said they are comfortable buying an unfamiliar brand on Amazon than they are in a retail store. If brands do not matter to Amazon shoppers – what does?

Pricing Matters

Amazon conversion rates go hand-in-hand with product pricing. Platform visibility is tilted in favor of sellers that offer the best pricing, customer service and product quality – regardless of brand recognition. And this is exactly where luxury brands struggle to compete.

A survey of Amazon shoppers revealed that pricing was the most important factor when making their purchasing decisions. And because of that good quality, lower priced items will have higher conversion rates and rank higher within Amazon search engine results.

This doesn’t mean that luxury brands should completely give up on the eCommerce platforms. There are different options for them to take when it comes to their eCommerce platform strategy.

What Luxury Brands Can Do

While brand names like Nike and Adidas are the exception, short-term success on platforms like Amazon is difficult for most high-end brands. But there are options that brand owners should consider to capture more sales in general and make a long-term play on eCommerce platforms.

Create a Presence on eCommerce Platforms

Listing your products properly on Amazon is essential for every brand. Close to 70% of online shoppers often compare products on brand-owned websites to the product listings on Amazon. Customer reviews on Amazon are great social proof when making a purchasing decision. Also, thrifty shoppers may be looking to see if they can save on shipping or even price by purchasing through Amazon.

Building properly optimized listings with high-quality images and content can help convey your branding and product quality to customers. It will help you project the same brand image and appearance of quality by investing in your eCommerce presence off your own website.

Compete for Branded Search Terms with Advertising

Utilizing Amazon’s advertising is another way that luxury brands can convert …read more